Streamlining labour laws: Ministry forms panel to hold talks with states

Govt forms panel to align state labour laws with new labour codes, pushing reforms to boost jobs, investment and ease of doing business

In a bid to nudge states to take further the labour reforms by aligning their existing laws with the provisions of the four new codes, the labour ministry has constituted an internal committee last month to undertake consultations, sources told Business Standard.

 

The committee will have representatives from both the Centre and the states and is expected to come up with suggestions for amendments in the existing labour laws so that they align with the ‘spirit and provisions’ of the new labour codes.

 

“The government remains committed to undertake labour reforms in all forms so as to improve the ease of doing business, attract investment and facilitate job creation. This committee, having representation from various stakeholders, will deliberate and come up with suggestions and amendments in the existing laws such as Factories Act, Shops & Establishment Act so that their provisions are in line with the new labour codes and both the workers and industry are benefitted,” 

a source in the labour ministry said.

 

As part of the labour law reforms, the parliament in 2019-20 had consolidated as many as 29 existing labour laws into four codes — Code on Wages; Code on Social Security; Occupational Safety, Health and Working Conditions Code; Industrial Relations Code. However, they are yet to be implemented as they face opposition from several workers’ groups.

 

“This move is part of the government’s efforts to advance labour reforms without getting entangled with the labour unions, who have adopted an obstinate and adamant stance while dealing with the question of labour reforms. The government is ready to talk on all provisions with the critics, if they provide some constructive feedback,” the sources added.

 

Earlier in May, Business Standard had reported that in the absence of a well-defined timeline to notify the four new labour codes, the Centre has started asking all the states and union territories (UTs) to make ‘necessary’ changes in their existing labour laws and align them with the new codes.

 

Several states have recently amended their own labour laws to align with some key industry demands, as part of a broader strategy to position themselves as an investment-friendly destination.

 

For example, at least 20 states and union territories (UTs) have increased the retrenchment threshold from 100 to 300 without government approval — a demand that industry has been making for a long time.

 

Meanwhile, 19 states and UTs have doubled the threshold for workers for applicability of the Factories Act to 20 (for units with power) and 40 (for those without power). An equal number of states and UTs have also raised the threshold for applicability of the Contract Labour Act to 50 workers from 20 workers at present.

 

“Many Opposition-ruled states have also gone ahead and made these changes in their laws, which indicate that these states also value the importance of investments, especially in the manufacturing sector. Hence, we look to carry forward the reform agenda,” the sources pointed out.

 

For example, when it comes to allowing women to work night shifts, 31 states and UTs have gone ahead with the change, while all states and UTs have notified reforms related to compliance notice before prosecution. 

Reforms strategy

 

• The committee will have representatives from both the Centre and states
• Aim is to suggest amendments so that existing labour laws align with the new labour codes
• Several states have recently amended their own labour laws to align with some key industry demands